SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1996
Commission file number 2-47115
CAPITAL RESOURCES REAL ESTATE PARTNERSHIP II
(Exact name of registrant as specified in its charter)
ILLINOIS 36-6503795
(State or other jurisdiction of (IRS Employer
incorporation or organization Identification
Number)
6210 Campbell Road Suite 140
Dallas, Texas 75248
(Address of principal executive offices)
Registrant's telephone number, including area code:
(972)380-8000.
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes: Y No:
REGISTRANT IS A LIMITED PARTNERSHIP
TABLE OF CONTENTS
Item 1. Financial Statements
The following Unaudited financial statements are filed
herewith:
Consolidated Balance Sheet as of September 30, 1996 and
December 31, 1995 Page 3
Consolidated Statements of Operations for the Three and Nine
Months Ended September 30, 1996 and 1995 Page 4
Consolidated Statements of Cash Flows for the Nine Months
Ended September 30, 1996 and 1995 Page 5
Notes to Consolidated Financial Statement Page 6
Item 2. Results of Operations and Management's Discussion
and Analysis of Financial Condition Page 7
Liquidity and Capital Resources Page 8
Other information Page 9
Signatures Page 10
The statements, insofar as they relate to the period
subsequent to December 31, 1995, are Unaudited.
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
CAPITAL RESOURCES REAL ESTATE PARTNERSHIP II
Condensed Consolidated Balance Sheets
September 30, December 31,
1996 1995
(Unaudited)
ASSETS
Real Estate assets, at cost
Land $137,971 $137,971
Buildings and improvements 841,116 841,116
979,087 979,087
Less: Accumulated (392,243) (356,243)
depreciation
Real Estate, net 586,844 622,844
Cash including cash 7,016 37,448
investments
Escrow deposits 51,129 21,440
Capital replacement reserve 0 3,357
Liquidity reserve 23,570 23,570
Other assets 83,492 83,713
TOTAL ASSETS $752,051 $792,372
LIABILITIES AND PARTNERS'
EQUITY:
LIABILITIES
Mortgage and notes payable $1,322,902 $1,338,356
Payable to Affiliates 253,683 219,647
Distributions payable 37,190 37,190
Real estate taxes payable 13,500 0
Security deposits 12,295 13,822
Interest payable 0 9,090
Accounts payable & accrued 38,671 23,235
expenses
Total liabilities 1,678,241 1,641,340
Partners Capital (Deficit)
Limited Partners (680,606) (607,245)
General Partner (245,584) (241,723)
Total Partners Capital (926,190) (848,968)
(Deficit)
Total Liability And $752,051 $792,372
Partners Equity
See notes to Condensed Consolidated Financial Statements
CAPITAL RESOURCES REAL ESTATE PARTNERSHIP II
Condensed Consolidated Statement of Operations
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
REVENUES 1996 1995 1996 1995
Rental income $99,667 $101,868 $320,274 $294,912
Other property 5,626 2,472 14,735 7,433
Total revenues 105,293 104,340 335,009 302,345
EXPENSES
Salaries & wages 23,149 28,384 63,818 70,535
Maintenance & repairs 24,095 40,770 76,615 154,325
Utilities 14,962 10,677 44,101 34,654
Real estate taxes 4,500 4,380 13,500 13,860
General administrative 13,224 6,799 43,135 41,629
Contract services 6,545 5,715 20,035 14,783
Insurance 2,892 2,664 9,422 8,331
Interest 26,992 27,499 81,369 82,496
Depreciation and 14,512 16,711 43,536 50,133
amortization
Property management fees 5,225 5,198 16,700 15,091
Total expenses 136,096 148,797 412,231 485,837
NET INCOME (LOSS) ($30,803) ($44,457) ($77,222)($183,492)
NET INCOME PER SHARE ($6.15) ($8.88) ($15.43) ($36.66)
See Notes to Condensed Consolidated Financial Statements
CAPITAL RESOURCES REAL ESTATE PARTNERSHIP II
Condensed Consolidated Statement of Cash Flows
Nine Months Ended
September 30,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITY
Net income (loss) ($77,222) ($183,492)
Adjustments to reconcile net income
(loss) to net cash
provided by operating activities:
Depreciation and amortization $36,000 $37,500
Net Effect of changes in operating
accounts
Escrow deposits ($29,689) ($35,874)
Capital replacement reserve $3,357 $20,047
Accrued real estate taxes $13,500 $13,860
Security deposits ($1,527) $740
Accounts payable $15,436 ($16,222)
Other assets $221 $22,755
Net cash used by operating activities ($39,924) ($140,686)
CASH FLOWS FROM INVESTING ACTIVITIES
Repayment of mortgage notes payable ($15,454) ($14,249)
Increase in note payable - affiliates $34,036 $145,397
Decrease in interest payable ($9,090) $0
Net cash provided by investing $9,492 $131,148
activities
NET INCREASE (DECREASE) IN CASH AND CASH ($30,432) ($9,538)
EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF 37,448 10,217
PERIOD
CASH AND CASH EQUIVALENTS, END OF PERIOD 7,016 679
See Notes to Condensed Consolidated Financial Statements
Basis of Presentation:
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although
the Partnership believes that the disclosures are adequate
to make the information presented not misleading. It is
suggested that these condensed financial statements be read
in conjunction with the financial statements and notes
thereto included in the Partnership's latest annual report
on Form 10-K.
Item 2. RESULTS OF OPERATIONS AND MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION
Results of Operations
THIRD QUARTER 1995 COMPARED TO THIRD QUARTER 1995
Revenue from property operations increased $953, or 0.91%,
for the third quarter of 1995, as compared to the 1995 third
quarter. The following table illustrates the components:
Three Month
Comparison
Increase
(Decrease)
Rental income (2,201)
Other property 3,154
Net Increase (Decrease) 953
Property operating expenses decreased $12,701, or 8.54%, for
the third quarter of 1996, as compared to the same period in
1995, primarily due to decreases in air conditioner and
parking lot repairs, as well as certain maintenance
personnel costs, that appeared to have increased in the
1996/1995 comparison. The following table illustrates the
components by category,:
Increase
(Decrease)
Salaries & wages (5,235)
Maintenance & repairs (16,675)
Utilities 4,285
Real estate taxes 120
General administrative 6,425
Contract services 830
Insurance 228
Interest (507)
Depreciation and amortization (2,199)
Property management fees 27
Net Increase (Decrease) (12,701)
NINE MONTHS ENDED SEPTEMBER 1996 COMPARED TO NINE MONTHS
ENDED SEPTEMBER 1995
Revenue from property operations increased $32.664, or
10.80%, for the first nine months of 1996, as compared to
the first six months of 1995. The following tables
illustrates the components:
Increase
(Decrease)
Rental income 25,362
Other property 7,302
Net Increase (Decrease) 32,664
Property operating expenses decreased $73,606 or 15.15%, for
the first nine months of 1996, as compared to the same
period in 1995, primarily due to decreases in air
conditioner and parking lot repairs, as well as certain
maintenance personnel costs, that appeared to have increased
in the 1996/1995 comparison. The follows table illustrates
the components by category:
Increase
(Decrease)
Salaries & wages (6,717)
Maintenance & repairs (77,710)
Utilities 9,447
Real estate taxes (360)
General administrative 1,506
Contract services 5,252
Insurance 1,091
Interest (1,127)
Depreciation and amortization (6,597)
Property management fees 1,609
Net Increase (Decrease) (73,606)
LIQUIDITY AND CAPITAL RESOURCES
The partnership reacquired the Brookhollow Apartments
through a foreclosure sale on December 16, 1986. The
property was recorded at its net realizable value, $746,663,
which determined to be the mortgage receivable balance of
$2,152,500 plus costs of repossession of $14,167, less
deferred gain on sale of $1,420,004.
In February, 1991, Amrecorp Realty Inc., resigned as the
Managing General Partner of the Partnership. As was
communicated to all limited partners, this step was taken in
order to minimize any effect that Amrecorp's financial
difficulties might have on the partnership. Management of
the Partnership's assets is performed by Univesco, Inc., a
Texas corporation, Robert J. Werra, President.
The operations of the Brookhollow Apartments stabilized
during 1993. The property had an operating profit for 1993.
An attempt was made to sell the property prior to March,
1993. The proposed sales price was $1,695,000. The purchaser
was not able to close the purchase and forfeited the $50,000
of its earnest money deposit. It's the General Partners
intention to continue operating the Brookhollow Apartments
while considering offers to purchase the property.
On November 12, 1993 the Partnership refinanced the
property's secured debt with a 8.15% ten year, mortgage from
Lexington Mortgage Company. The loan proceeds were provided
through a Real Estate Mortgage Investment Contract sponsored
by Donaldson, Lufkin & Jenrette. The $1,375,000 mortgage
loan provides for monthly payments of principal and interest
of $10,749 based on an amortization period of 300 months
with a final payment of approximately $1,118.000 due in
December, 2003. The loan proceeds were used to pay off the
old loan balance of $740,283, which include a discount of
$40,775 from the old lender negotiated for early payment .
The partnership agreement was amended by vote of the limited
partners to include the appointment of a new corporate
General Partner, CRREP, Inc., a Texas corporation wholly
owned by Robert J. Werra. In conjunction with the 1993
refinancing, the Partnership was required to liquidity
reserve and a capital replacement reserve which had balances
of $48,500 and $22,400, respectively, as of Dec ember 31,
1993. Each of these reserves is refundable to the
Partnership.
Part II
Other Information
Item 1. Legal Proceedings
The Registrant is not engaged in any material
legal proceedings other than
ordinary and routine litigation incidental to
the business.
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of
Security Holders.
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K as of
September 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto
duly authorized.
CAPITAL RESOURCES REAL ESTATE
PARTNERSHIP II an Illinois limited
partnership
By: /s/ Robert J. Werra
Robert J. Werra,
General Partner
Date November 11, 1996
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THE SCHEDULE CONSTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM BOTH
THE SEPTEMBER 30, 1996 BALANCE SHEET AND STATEMENT OF INCOME AND EXPENSES
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
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<NAME> CAPITAL RESOURCES REAL ESTATE PARTNERSHIP II
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